Pure Storage's GenAI Pods and AI Trends Could Spark Recovery

Key Points

• Pure Storage is a leading enterprise storage systems provider riding the AI boom as storage modernization drives demand for its all-flash storage arrays.
• Pure Storage’s FlashArray solves the problem of data silos as it enables data to be available in real-time for analytics and AI workloads without having to be copied and duplicated to a repository for access.
• Pure Storage announced its GenAI Pod, which will simplify and enable one-click GenAI deployment initially for financial analysis, drug discovery, trade research and agenic AI.

Pure Storage Inc. NYSE: PSTG is a leading enterprise data storage provider specializing in all-flash storage solutions using solid-state drives (SSDs). Their FlashArray is designed for low latency, scalable and reliable storage for applications requiring high-speed access to massive datasets like machine learning (ML), real-time analytics, virtual machines and high-performance computing (HPC). The artificial intelligence (AI) boom has jolted the demand for faster storage solutions, which falls right into the computer and technology sector company’s wheelhouse. The debut of its GenAI Pods could be a game changer for the deployment of AI and acceleration of AI initiatives.

Storage Modernization to Prepare for AI Deployment

Storage modernization is driving demand for Pure Storage solutions. Data storage is traditionally highly siloed meaning that data sets are generally stored in different areas for different purposes like databasing or file storage. In order to get access to that data for analytics or AI, it needs to be copied to a whole new area like a data warehouse (structure data) or data lake (unstructured data). The data can get old sitting there.

Enterprises need access to the live data where it actually sits, which has driven the demand for a new data architecture. This is where Pure Storage comes into the picture by breaking down data siloes to enable access to live data for AI workloads, machine learning and real-time analytics.

How Pure Storage Accommodates the Storage Modernization Trend

Typically, data has to be copied from one location to a repository (data warehouse or data lake) to be used for different applications, like analytics. This takes time and energy, generating data duplication and lag along the way, not to mention the data can get outdated quickly. Pure's FlashArray enables data to be immediately accessible for analysis in real-time with no need to relocate or copy the data. It also uses data reduction technologies like deduplication and compression to optimize resources. Its FlashBlade platform is designed for high-performance workloads requiring extremely fast parallel live data access. This enables enterprises to manage both data at rest (long-term storage) and data in motion, which is streaming and real-time data.

Its Pure Fusion storage-as-code automates enterprise storage provisioning, deployment and scaling of workloads across the entire fleet. Enterprises are upgrading their storage architecture to optimize application modernization or prepare for AI deployment.

Debuting Pure Storage GenAI Pods: A One-Stop Solution for GenAI Deployment

Launching in the second half of 2025, Pure Storage GenAI Pods is a full-stack solution enabling enterprises to deploy GenAI projects using turnkey designs built on the Pure Storage platform. It's designed to enable companies to work through siloed data platforms and complex GenAI pipelines rapidly.

Normally, when companies try to set up advanced AI systems like GenAI in private clouds, they have to manage the complicated mix of software, hardware, AI models and development tools that run the systems effectively and economically. Simultaneously, companies need a single storage solution that can handle all the data storage needs and address the issue of data silos. This is a costly and complicated endeavor.

The Pure Storage GenAI Pod simplifies the process by providing a ready-to-use, pre-configured platform that has been specifically designed for AI workloads, enabling businesses to launch AI projects with a single click and manage them more easily over time.

It integrates tools like Portworx, which automates the deployment of NVIDIA Co. NASDAQ: NVDA AI software and the Milvus vector database to scale AI and simplify operations. Initial industry use cases will include trade research, drug discovery, investment analysis and retrieval-augmented generation (RAG) with agenic frameworks for chatbots, knowledge management and semantic search. For the initial set of designs, Pure Storage has partnered with NVIDIA, Cisco NASDAQ: CSCO, Meta Platforms Inc. NASDAQ: META, Super Micro Computers Inc. NASDAQ: SMCI, Arista Networks Inc. NASDAQ: ANET, Red Hat and WWT.

Pure Storage Hits Its Stride With the AI Boom

It integrates tools like Portworx, which automates the deployment of NVIDIA Co. NASDAQ: NVDA AI software and the Milvus vector database to scale AI and simplify operations. Initial industry use cases will include trade research, drug discovery, investment analysis, and retrieval-augmented generation (RAG) with agenic frameworks for chatbots, knowledge management, and semantic search. For the initial set of designs, Pure Storage has partnered with NVIDIA, Cisco NASDAQ: CSCO, Meta Platforms Inc. NASDAQ: META, Super Micro Computers Inc. NASDAQ: SMCI, Arista Networks Inc. NYSE: ANET, Red Hat and WWT.

Raised Q3 But Lower Full Year 2025 Guidance Sinks Shares 25%

Pure Storage also raised its fiscal third quarter revenue guidance to $815 million versus $810.54 million consensus estimates. It sees a non-GAAP operation margin of 17.2%. However, its full-year 2025 revenue guidance fell short of consensus estimates at $3.10 billion versus $3.13 billion, while the non-GAAP margin is expected to be around 17%. This is what caused shares to drop 25% following the announcement.

PSTG Stock Forms a Weekly Descending Triangle Pattern

A descending triangle is a bearish chart pattern comprised of a descending upper trendline representing lower highs on bounces converging with a flat-bottom lower horizontal trendline representing a firm support at the apex point. The breakdown occurs when the stock collapses beneath the lower trendline support. A breakout can also be triggered if the stock surges through the upper trendline resistance.

PSTG has been in a weekly descending triangle since the swing high peak at $70.41 in June 2024. Shares have since been making lower highs on each bounce, forming a firm descending trendline. The flat-bottom lower trendline formed at $45.15, where a double bottom has been formed. The weekly anchored VWAP is at $50.86. The weekly RSI is flat around the 48-band. Fibonacci (Fib) pullback support levels are at $48.58, $46.20, $41.98, and $37.61.

PSTG’s average consensus price target is $67.95, implying a 31.53% upside and its highest analyst price target sits at $93.00. It has 14 analysts' Buy ratings, seven Holds, and one Sell Rating. The stock has a 2.74% short interest.

Actionable Options Strategies: Bullish options investors can buy PSTG stock on pullbacks using cash-secured puts at Fib pullback support levels.